National Consumer Disputes Redressal
Orissa State Financial Co. & Anr. vs Mohd.Ajhar Ali on 21 March, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.4298 OF 2007 (From the order dated 28.11.2002 in Appeal No.721/2002 of the State Commission, Orissa) Orissa State Financial Company & Anr. Petitioners(s) Versus Mohd. Ajhar Ali Respondent(s) BEFORE : HONBLE MR.JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioners(s) : Mr.Soumyajit Pani, Advocate For the Respondent(s) : Mr.R.N.Rout and Mr.Niraj Kumar Advocates Pronounced on 21st March, 2012 ORDER
PER VINEETA RAI, MEMBER This revision petition has been filed by Orissa State Financial Corporation & Anr. (hereinafter referred to as the Petitioner) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Orissa (hereinafter referred to as the State Commission) in favour of Mohd.Ajhar Ali, Respondent herein, who was the original complainant before the District Forum.
In his complaint before the District Forum, Respondent/ Complainant had contended that he had been sanctioned a loan of Rs.15 lakhs on 25.08.2000 for construction of a market complex for his own use at Kendrapara town. However, out of the total sanctioned loan amount of Rs.15 lakhs, the Petitioner/Corporation disbursed only Rs.7 lakhs upto 21.09.2001 and did not release the balance amount within the stipulated period of six months from the date of sanction which was in violation of the terms and conditions of the loan agreement although the Respondent had fully utilized the disbursed loan amount and had also invested 34.57% from his own funds. Being aggrieved, Petitioner filed a complaint before the District Forum on grounds of deficiency in service and requested that the Petitioner be directed to pay him Rs.4,57,000/- as compensation on the following accounts:
(i) Mental agony Rs.1,00,000/-
(ii) Loss of equipments, materials Rs.50,000/-
increase of establishment cost, material cost etc.
(iii) Payment of excessive interest Rs.20,000/-
(iv) Loss of room rent Rs.20,000/-
(v) Payment of salary Rs.51,000/-
(vi) Loss of room rent Rs.1,86,000/-
(vii) Cost of extra expenditure for Rs.51,000/-
maintenance
(viii) Expenditure on attending office Rs.30,000/-
by vehicle, fooding, lodging etc. Total Rs.4,57,000/-
The Petitioner challenged the above contentions and stated that it was justified in not releasing the remaining loan because Respondent had violated two of the terms and conditions of the Loan Agreement i.e. (i) he failed to invest 34.57% from his own resources as required under Clause 8 of the terms and conditions of the loan agreement and; (ii) the market complex was being constructed with column structure instead of pile foundation. Further the complaint is also not maintainable as the Respondent is not a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986 since the loan was sanctioned for commercial purposes.
The District Forum after hearing the parties allowed the complaint by concluding that as per the report of the Court Commissioner i.e. an Executive Engineer who had been appointed to find out the approximate value of the market complex and to verify whether the Respondent had invested 34.57% from his own sources had confirmed that there was no violation of the terms and conditions since Respondent had invested 34.57% of the estimated project cost from his own funds. District Forum directed the Petitioner to pay the Respondent, Rs.4.25 lakhs as compensation towards mental agony, harassment and financial loss etc. within a period of one month failing which the Petitioners are liable to pay Rs.500/- per day for the delay. The District Forum further observed that as the Respondent had agreed to give up his claim for disbursement of the balance loan amount from the Petitioner, no direction could be issued to Petitioner for releasing or non-releasing the balance loan amount in favour of the Respondent/complainant.
Being aggrieved, Petitioner filed an appeal before the State Commission. State Commission while concluding that there was no violation of terms and conditions by the Respondent on both counts, however set aside the compensation of Rs.4.25 lakhs awarded by the District Forum and stated that the ends of justice would be met if Rs.50,000/- is awarded to the Respondent as compensation for deficiency in service. The relevant part of the order of the State Commission reads as follows:
The Executive Engineer is an independent officer who is not connected with either of the parties. Therefore, there is no reason as to why we should not accept the report. As mentioned above, the Respondent received total amount of Rs.5,42,900/- (The District Forum has observed that a total amount of Rs.9,02,000/- was disbursed).
Be that as it may, the construction cost, as found by the Executive Engineer is Rs.27,67,000/- which is against the disbursement amount of Rs.9 lakhs and odd. Therefore, we are inclined to hold that the balance amount was self-investment of the Respondent. This being the position, the first ground of objection is not valid.
The appellants pleaded that the Respondent should have gone for pile foundation as per the approved plan. It is an admitted fact that the appellants deputed its engineer for a valuation report, who inspected the site and found that the respondent had constructed the market complex building upto roof level with column structure foundations. If construction was not made as per the approved plan, the appellants could have withheld disbursement of loan. Having not done so, it cannot take the plea that the construction should have been pile foundation. The second ground of objection is also not tenable.
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We rejected the claim of Rs.20,000/- and Rs.1,86,000/- for alleged loss of room rent as it is totally imaginary. Similarly, claim of Rs.50,000/- towards alleged loss of equipments etc. is not tenable.
Hence, the present revision petition.
Counsel for both parties made oral submissions.
Counsel for Petitioner reiterated that the State Commission erred in concluding that there was any deficiency in service and stated that there was a clear violation of two of the terms and conditions of the agreement, namely, that Respondent did not made the required investment and the report of the Executive Engineer to the contrary is not credible. Further, it is not disputed that the Respondent instead of pile foundation as per the approved plan had constructed the building with column structure foundations and therefore, the loan amount was rightly not disbursed and there is no deficiency in service.
Counsel for Respondent on the other hand contended that as observed by the State Commission, the Executive Engineer is an independent officer and the Petitioner has not been able to show any convincing reasons as to why his Report should not be accepted. This Report after assessing the market value of the construction had found that the Respondent had invested more than his stipulated share of 34.57% of money. Also as observed by the State Commission if the construction was not as per the approved plan, the Petitioner could have withheld the disbursement of the loan amount immediately which it did not do and therefore, at this late stage, Petitioner cannot take this plea that the construction should have piled foundation.
Counsel for Respondent again submitted that since mental agony and financial loss was caused to him because of non-disbursement of the loan, this Commission may consider restoring the order of the District Forum in respect of compensation awarded by it.
We have heard learned Counsel for both parties and have gone through the evidence on record. The fact that Respondent was sanctioned a loan of Rs.15 lakhs by the Petitioner for purposes of completion of semi-constructed market complex building at Kendrapara town is not in dispute. Further, we note that out of this amount, a sum of Rs.9,02,000/- was disbursed by the Petitioner and the remaining amount was withheld on account of violation of two of the terms and conditions of the loan agreement, namely, Respondent had not invested the required 34.57% of the project cost from his own source and; there was a violation of the approved plan since the Respondent instead of going for pile foundation had constructed the complex with column structure. Regarding the first point, we agree with the finding of the State Commission that the Respondent had invested more than 34.57% as assessed by the Executive Engineer who was appointed by the Court to report on the present cost of the structure.
The Executive Engineer, as observed by the State Commission is an independent officer and the Petitioner has not been able to produce any cogent evidence to controvert his findings or to find any loophole in the same. We further find force in the Respondents contentions that once the building had been constructed upto the roof level and the Petitioner had disbursed the loan, it could not at the stage when the construction upto roof level had been completed withhold disbursement of the remaining loan amount on grounds of purported non-compliance in respect of the foundation of the building. Therefore, we agree with the contention of Counsel for Respondent that objection on these grounds is not tenable at this stage and was not adequate justification for not releasing the remaining loan amount.
Regarding the contention of the Petitioner that the Respondent is not a consumer, the District Forum being the first court of fact after due consideration and on the basis of evidence produced before it, has concluded that the Respondent is a consumer as per the Consumer Protection Act, 1986. We also note that in his complaint before the District Forum, Respondent had clearly stated that the construction of the marketing complex was for his own use.
Keeping in view these facts, we find no infirmity in the reasoning of the State Commission in directing the Petitioner to pay the Respondent, a sum of Rs.50,000/- as compensation for deficiency in service and uphold the same. The revision petition is therefore, dismissed. Petitioner is directed to pay the Respondent, Rs.50,000/- within six weeks from the date of receipt of this order failing which the operative part of the order of the District Forum will be restored and enforced.
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(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/